Israel will not transfer a shekel of tax revenue to the Palestinian Authority if it reaches a reconciliation agreement with a Hamas that refuses to forswear terrorism and recognize Israel, Foreign Minister Avigdor Lieberman said Wednesday.

Lieberman's comments were made even as UN Secretary-General Ban Ki-moon, Quartet envoy Tony Blair, and the EU's ambassador to Israel Andrew Standley called over the last two days for Israel to release the $100 million in tax revenue to the PA it has held up since UNESCO voted earlier this month in favor of admitting the Palestinians into the organization.

There were also media reports that US Secretary of State Hillary Clinton made a similar request to Prime Minister Binyamin Netanyahu when the two spoke by phone Monday evening to discuss the new sanctions the US slapped on Iran.

Netanyahu's forum of eight senior ministers met Sunday night and decided not to lift the freeze of the tax transfer at this time. The decision on whether to extend the freeze is expected to be made after it becomes clear whether a Hamas-Fatah reconciliation pact emerges from Thursday's talk between the heads of both groups in Cairo.

Lieberman told reporters before meeting Montenegro's Foreign Minister
Milan Rocen in Jerusalem that Palestinian Authority President Mahmoud
Abbas was placing considerable pressure on the international community
to convince Israel to release the funds. At the same time, Lieberman
said, Abbas was working hard to establish a government with a Hamas that
continuously refused the international community's call for it to
recognize Israel, stop terrorism and accept previous Israeli-Palestinian
agreements.

"Israel will not transfer funds to those interested in destroying it,
and if Abu Mazen (Abbas) is a partner with Hamas, it is clear he is not a
partner for peace," Lieberman said.

Shortly after his comments, Quartet envoy Tony Blair issued a rare statement calling on Israel to release the funds.

"The funds are vital for the functioning of the PA and Israel's
withholding of these Palestinian funds threatens the salaries of some
180,000 employees, including Palestinian security officials who are
working to provide security in the West Bank," Blair said. "Only those
who oppose peace and Israeli-Palestinian cooperation benefit from the
withholding of PA funds."

The idea that the freeze of the funds was harming the Palestinian
security apparatus was picked up at a Wednesday EU press briefing by
Henrik Malmquist, the head of the EUPOL COPPS mission working with the
Palestinian police in the West Bank. Malmquist said that the continued
freeze would have a "direct impact on the [Palestinian] security
services, and it will be a problem to keep them going at the current
level."

Malmquist said that the lack of funds restricted the PA's ability to pay
for gas needed to redeploy forces. He said in the long term it could
also create a morale problem among the Palestinian security services who
might question the very legitimacy of the force.

EU Ambassador Andrew Standley said the money being held up represented
some 30 percent of the Palestinian Authority's revenues and that the
freeze has had a "detrimental impact on the PA's ability to provide
services, including security services that directly impact on Israel."

Furthermore, Standley said the EU wanted to see an immediate renewal of
the funds transfer because if there was a shortfall, the Palestinians
would look to other sources – such as the EU – for increased assistance.

Ban, meanwhile, called on Netanyahu in a phone conversation Tuesday to
release the funds, saying Israel was obligated under previous agreements
to do so.